3.4 Payment into instalments of the substitutive tax due for
re-evaluation of participations and land properties

3.5 Adjustment of rations on usufructs and life rents for indirect
taxation

Effects on contribution

1. INTRODUCTION

With Ministry Decree dated 12.12.2013, published on the Official
Gazette on 13.12.2013 nr. 292, the legal interest rate set by
article 1284 of the Italian Civil Code has been decreased from 2,5%
to 1% on a year basis.

2. EFFECTIVE DATE

The new legal interest rate at 1% is effective starting from
January 1st 2014.

3. FISCAL EFFECTS

The variation of the legal interest rate has effects also on
some fiscal measures.

3.1 Self Regularization

The decrease of the legal interest rate implies the decrease of
the amounts due for self-regularizations made under article 13 of
the Legislative Decree nr. 472 dated December 18 1997. Regularizing
missed, insufficient or delayed payment of taxes through the
self-regularization procedure, implies the payment, in addition to
the reduced penalty, of legal interests based on a daily
calculation starting from the day following the original
deadline.

The legal interest to be paid is the one enforced in every
single period, therefore:

2,5%, up to December 31 2013;

1%, from January 1 2014 to the day of payment included.

In example, the regularization of the missed payment of the
second instalment of Tax on Corporate Income (IRES), expired on
December 12 2013, made on February 10 2014, will be charged with
interests according to the following:

2,5%, for the period December 11 2013 - December 31 2013;

1%, for the period January 1 2014 – February 10
2014.

3.2 Instalment Plans For Amounts Due on the Base of
Assessments

The decrease to 1% of interest legal rate is applied also to
instalments of amounts due on the base of the following
assessment's procedures:

acceptance to invitations to tax consultations under article 5
of the Legislative Decree nr. 218 dated June 6 1997; interests are
charged starting from the day following the payment of the first
instalment;

acceptance to tax audits results under article 5 of the
Legislative Decree nr. 218 dated June 6 1997; interests are charged
starting from the day following the notification of the partial tax
assessment;

acceptance to tax assessment under article 8 of the Legislative
Decree nr. 218 dated June 6 1997; interests are charged starting
from the day following the acceptance;

tax agreement under article 48 of the Legislative Decree nr.
546 dated December 31 1992; interests are charged starting from the
day following the agreement's signature.

Crystallization of the legal interest rate

With the Circular Message nr. 28 dated June 21 2011 (§
2.16), the Italian Tax Agency has clarified that, differently from
the procedure mentioned above for the self-regularization, the
legal interest rate applicable to instalments related to amounts
due on the base of tax assessments, remains unchanged also for the
following years. This means that if the assessment is issued in
2013 and the tax payer is given the benefit to pay on instalments,
the legal interest rate to be charged will be always 2,5% for the
entire duration of the instalment plan.

3.3 Measure of Interests Not Agreed in Writings

The new measure at 1% of the legal interest rate is enforced
also for interests not agreed in writings as for:

interests concurring to form the corporate income (art. 89
paragraph 5 of the Tax Law - TUIR).

3.4 Payment into Instalments Of The Substitutive Tax Due
for Re-Evaluation of Participations and Land
Properties

In case of re-evaluation of shares not listed in the stock
exchange or land properties under articles 5 and 7 of the Law nr.
448 dated December 12 2001 and subsequent modifications,
instalments of the substitutive tax applied are not affected by the
decrease of the legal interest rate, that remains, therefore at
3%.

3.5 Adjustment of Rations on Usufructs and Life Rents For
Indirect Taxation

With a specific Decree the Ministry of Economics will adequate
to the new legal interest rate starting from January 1 2014, also
the ratio to calculate the value, for register, cadastral,
inheritance and charitable contribution taxes of:

perpetual annuities;

time limited annuities or pensions;

life usufructs rights.

4. EFFECTS ON CONTRIBUTION

The decrease of the legal interest rate is effective also for
missed or delayed payments for social security and pension
contributions under article 116 of the Law nr. 388 dated December
23 2000.

In fact administrative fines can be decreased to the legal
interest rate in case of:

The Autumn Budget contained a number of well trailed measures together with some surprises. These are the main developments we have highlighted in our Tax Blog with links to the individual blog posts.

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